What You Need to Keep in Mind When Building a Business on Amazon

Most of us desire to have financial freedom and obtain a work-life balance. This pursuit calls for having multiple sources of income or finding an option that works really well for you. The internet has increased the ease of doing business. Learning how to build a business on Amazon is a worthy pursuit as it has the ability to replace your current source of income. What's more, it gives you the benefit of a flexible work schedule giving you that work-life balance that you have always wanted. There are five options for selling products on Amazon. These are:

1. Selling private label products

This is a lucrative way of making money on Amazon. The private label refers to selling products made for one particular merchant where a unique brand is used when selling. This is a popular option for entrepreneurs whose aim is to establish their own brand.

To sell these products, you need to purchase white label products and sell them under your brand or private label. Such white label products can be found on Alibaba, which is the world's largest marketplace for B2B. Here, you can have access to manufacturers from all around the world and order your products. There are various alternatives that you search through the internet to find these private label products.

As we earlier stated, this is a lucrative venture that can earn you a lot of money.

2. Selling wholesale goods on Amazon.

This is somewhat similar to selling private label goods on Amazon. The difference is, you do not sell your private label or brand. You sell products from other brands that are well known. This product is a little easier as you need not concern yourself with branding or advertisement. This means that you get to focus more on growing the business.

The downside is the competition here gets stiff. The business model is also not very scalable as when you are selling private label products. However, you still get to earn a lot more in this setup.

3. Online Arbitrage

Here, you purchase goods from other online stores and sell them on Amazon.

4. Retail Arbitrage

In this model, you get to buy items from retail stores and sell them on Amazon. Such stores include Walmart, Barnes, Target, and many more.

5. Selling books on Amazon.

This is an easy place to start for beginners before launching a private label business. You can get books from various sources such as libraries, estate sales, buying from printing companies and authors, and many others.

When building a business on Amazon, you can use three ways to fulfill an order. These are:

Fulfillment by Merchant. It is abbreviated as FBM. Here, you list your product on Amazon, and once you get a customer, you pack and ship the item by yourself.

Amazon Vendors: They are also referred to as AMZ in short. Here, you sell your goods to Amazon through a central merchant. You can use this model if you are seeking to get rid of your inventory.

Fulfillment by Amazon: This is also referred to as FBA. It is an exciting option that most people prefer. We will look at this fulfillment option in detail.

Fulfillment by Amazon

If you want to build a business on Amazon, this is an ideal option for you. Here, Amazon performs the following roles for you.

Product storage

Processing shipping order

Processing returns

Shipping products

Customer service

With these logistics out of the way, FBA gives you more time to focus on your business fully. All you need to do is ensure that your inventory is fully stocked, and you are marketing your products on various online platforms. You can invest in various online tools to help manage your amazon business. Most of these tools can even alert you when your stock is running very low.

How an FBA works

The first thing to do is to ensure that you have found your products. Using platforms such as Alibaba, you can order the product that you want to sell on Amazon. You can find products and suppliers as well as manufacturers by entering a keyword search on these platforms.

Once you have found the product, negotiate the price, and get your product shipped to an Amazon center where the order can be fulfilled.

Your products are then added to the Amazon inventory when they are delivered. If any damage happens at this stage, a full retail price is refunded by Amazon.

You are then free to market and promote your products on any site. Once a customer makes a purchase, Amazon processes the order through an automated process for you.

The product is then commissioned and shipped to the customer.

Amazon will also handle the after-sale experience by handling customer care or exchanging a product if it is not satisfactory.

Armed with this information, you can now go ahead and build a business on Amazon.

Admin is a professional blogger and digital marketer at 99techpost. She writes about Digital Marketing, Technology, WordPress, SEO, Web Design and Development . You can also follow us on facebook & twitter. Feel free to contact us if you have any queries.